The State of M&A: Taking the Temperature at Tulane

If the Tulane Corporate Law Institute is a barometer for M&A sentiment, this year’s forecast is still uncertain. That’s a sentiment we heard across the halls of The Roosevelt last week, where dealmakers gathered to take stock of an M&A market that’s proving harder to navigate than some anticipated.

As 2024 drew to a close, the mood in dealmaking circles was cautiously optimistic. Interest rates had eased, the U.S. presidential election was poised to bring some clarity, and corporate players were gearing up for a rebound in M&A activity. Fast-forward to today, and the market has been slower than expected. The deals are there—but so are the roadblocks.

At the same time, it’s clear that strategic communications in M&A have never been more critical. With an expanding web of stakeholders and increasingly vocal players, companies can no longer afford to wing it when announcing a deal. If 2024 taught us anything, it’s that getting the narrative right, and understanding how to navigate the media, matters as much as the numbers.

What’s Driving 2025’s Slow Start?

Few issues have cast a longer shadow over M&A sentiment in 2025 than tariffs. While dealmakers have adjusted to an ever-evolving regulatory landscape, the uncertainty surrounding trade policies has proven to be a stubborn headwind. The sheer unpredictability of tariff decisions—both in timing and magnitude—has forced companies to rethink valuations, supply chains, and entire deal strategies.

For some, tariffs have put transactions on ice, with buyers hesitant to commit until there’s more clarity. Others have sought creative structuring solutions, using earn-outs and contingency clauses to hedge against shifting trade policies. But one thing is clear: until the dust settles, many dealmakers are stuck in wait-and-see mode.

Adding to the complexity is the broader question of how tariffs will play into national security concerns, particularly in cross-border M&A. Sectors like technology and critical infrastructure are facing heightened scrutiny, making foreign investment more challenging than ever. The strong U.S. dollar has made outbound deals more attractive, but inbound interest continues to face steep regulatory and economic hurdles.

How Does Private Equity Fit in?

Private equity has been more active than corporate buyers, but it too is facing challenges. Fundraising has become significantly more difficult, as lower distributions have made LPs more hesitant to commit new capital. Many PE firms are sitting on long-held investments, struggling to find viable exit opportunities, which has created a backlog of assets that need to be monetized.

At the same time, there is still an abundance of dry powder that needs to be deployed. With public market valuations still elevated and strategic buyers sitting on the sidelines, PE firms have increasingly turned to creative deal structures—such as earn-outs and minority investments—to bridge the gap between buyer and seller expectations. But until there is greater clarity on tariffs, regulation, and interest rates, the pace of acquisitions is likely to remain measured.

What Does It Mean for Shareholder Activism?

With M&A playing less of a role in shareholder activism, activists have pivoted their strategies. Increasingly, they are focusing on operational improvements and management changes rather than pushing for outright sales. CEOs have found themselves in the crosshairs, with activists more willing than ever to call for leadership changes. While this has always been a component of activism, there is now a more explicit focus on forcing executive turnover as a means of driving performance.

At the same time, the rise in settlements suggests that companies are more willing to engage with activists rather than risk a prolonged fight. The implementation of the universal proxy has also shifted the dynamics, allowing shareholders to mix and match nominees rather than voting for an entire slate. This makes it critical for companies to effectively tell their story and highlight the strength of their directors.

Further complicating the activism landscape are the changes to 13G filing requirements. With less transparency around shareholder positions, companies may find it harder to gauge investor sentiment ahead of a proxy fight. Some believe this could make proxy advisory firms even more influential, as shareholders may rely on their recommendations more heavily in the absence of clear signals from other investors.

How to Navigate the Environment?

The early months of 2025 have thrown a curveball to those hoping for a quick rebound. So far both volume and values are down, the rate-cutting cycle isn’t shaping up quite as expected, and the impact of tariffs remains an open question. Given the persistent uncertainty in the broader market, getting the narrative right has never been more important. Companies need to be proactive in engaging with investors, regulators, and other key stakeholders.

A well-executed communications strategy—one that blends media engagement, public affairs, and direct shareholder outreach—can make all the difference in securing buy-in for strategic moves. Whether preparing for an acquisition, responding to activist pressure, or navigating regulatory hurdles, having a clear, compelling, and consistent story is critical to success in 2025.

It’s a waiting game, but not an indefinite one. At some point, the deals have to get done.